The distributor trains a third of its sales staff on a Cisco program to encourage VARs to sell more service contracts.Distributor Tech Data has trained more than 100 sales representatives in a Cisco Systems. incentive program to encourage solution providers to attach services to product sales.
The program, called the ARM (Attach, Renew, Multiyear) Service Incentive Program, is designed to educate resellers on how to sell, renew, offer upgrades to and help lock in service agreements with Cisco products.
The training puts the distributor's sales staff in a position to help VARs, who buy products and services from the distributor, to increase profits, retain customers and manage growth, said Donna Turgeon, Tech Data's director of networking product marketing.
The training is the same that Cisco gives its VAR partners. And even though the Clearwater, Fla.-based distributor could have passed on the training, Turgeon said Tech Data saw the value in leveraging ARM to better communicate with VARs about the benefits of packaging SMARTnet contracts with Cisco products.
"Part of the package was that we were able to differentiate ourselves and what we could do to add value to what Cisco is doing and drive more Cisco business through the channel," she said.
Turgeon said she intends to have the rest of Tech Data's of 300-member sales staff take the course.
The training, which is Web-based, takes only 5 hours to complete. It's a relatively small time investment considering the potential benefits. In 2005, service contracts accounted for nearly $4 billion of Cisco's $20 billion in revenue from sales, according to the vendor.
Tech Data is the first distributor to leverage the ARM program, but Cisco is looking into having its other distributors also participate, said Lauren Robinette, manager of U.S. Commercial Theater for Service for Cisco.
By giving distributors the same training as Cisco's VARs, communication between them and the VARs is bound to improve, and ultimately so will the customer benefits, said Steven Robb, vice president and general manager at LaSalle Business Solutions, an IT provider of asset management and maintenance contract services, in Rosemont, Ill.
Robb said his VAR partners have participated in the ARM program since Cisco began offering it last October, and he said it allows better communication between his company and distributors such as Tech Data.
In addition to generating co-marketing money from Cisco, Robb said that ARM allows his sales force to package hardware and equipment with maintenance agreements designed to help protect customers.
"Networks now are so critical, and if your customer takes a hit you want to make sure that they are covered in the right manner," Robb said.
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